Clearing houses -- the plumbers of high finance -- could become the next casualties of the crisis as regulators insist that banks run their riskiest and private trades through them.
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At the moment banks conduct over-the-counter trades between themselves: one to one dealings often involving multimillion-euro bets on differences in interest or other rates, the scale and complexity of which can be difficult to track.
But with the financial crisis still raging and banks, hedge funds and governments alike faced with unforeseen levels of debt, regulators are now forcing this shadowy, $600-trillion industry into the light.
The question being asked by industry insiders is whether the clearing houses, also known as central counterparties (CCPs), are any more secure.
"What happens if they go bust? I can tell you the simple answer: mayhem. As bad as, conceivably worse than, the failure of large and complex banks," Paul Tucker, deputy governor of the Bank of England, said in October.
Clearing houses, such LCH.Clearnet, Deutsche Boerse's Eurex Clearing and the Chicago Mercantile Exchange's CME Clearing, sit between the parties at either end of a trade.
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They protect companies from default because they hold collateral on behalf of their numerous members that can be used to reimburse individual firms if one member becomes insolvent -- a standard model used in various exchange-traded markets around the world.
But in taking on over-the-counter (OTC) products the concern is that the clearing houses will not have sufficient collateral to cover the scale of possible future positions.
In the view of International Monetary Fund economist Manhmohan Singh, the central counterparties dealing with over-the-counter derivatives need to hold $2 trillion in collateral if they are to successfully manage this kind of trading.
"The mandated clearing of OTC derivatives is a complex matter on many levels. Derivatives require a lot of collateral because the duration of the contracts can be very long," said Diana Chan, the Chief Executive of clearing house EuroCCP.
Clearing had been a largely overlooked feature of trading on exchanges for decades until it was thrown into the spotlight by the high-profile default of Lehman Brothers in September 2008.
In the aftermath of its collapse Lehman's trading positions in markets that used clearing houses were sorted out in a matter of days. Those in non-cleared markets took months if not years.
Mindful of this experience, regulators in the United States and Europe have urged many of the largest over-the-counter markets to start using clearing houses in order to mitigate against any other default by a large trading firm.
The Dodd-Frank Bill in the United States and Europe's Mifid II and EMIR acts will force firms trading standardised products, such as the most common swaps, to use clearing houses when they take effect, perhaps as early as this year.
But forcing these trades into clearing houses does not in itself address the risk of a trading firm default.
"The truth is the possibility of a clearing house going into default has only really been considered recently," said Chris Jones, executive director and head of risk management at LCH.Clearnet.
The IMF's Singh argues banks and brokers should stump up more collateral - a tough requirement in a low-return, risk-averse trading environment where what little collateral is left is needed by banks to meet other new safety requirements relating to their capital levels.
"The decline in the overall availability of collateral is roughly $4-5 trillion since pre-Lehman days," said Singh.
"Unless there is a rebound..the likely asymmetry in the demand and supply in this market may entail some difficult choices for the markets and the regulators," he said.
To this end, global securities regulator IOSCO is leading a process of asking clearing houses to draft what have become known in the industry as "living wills", outlining the procedures in the event that clearing house goes down.
"The regulators, led by IOSCO, are working to define the criteria for CCPs in the event of a default and we welcome this effort," said Paul Orchard, head of OTC Clearing at UBS .
WHERE DOES THE BUCK STOP?
Among the many questions now being asked perhaps the most urgent still to be answered is who bears responsibility for propping up any clearing house that may get into trouble.
Ultimately, says Orchard, the members of any clearing house are its underwriters should it get into difficulty.
But banks already face significant difficulties in keeping their own businesses afloat and do not like the idea that they are on the hook in the event of a CCP default while shareholders reap the rewards when times are good.
And central banks, lenders of last resort to banks, are unlikely to step in either.
"There is a wide misconception that central banks are the lender of last resort in the event of a CCP default but central banks...do not provide credit on an unsecured basis," said Chan.
Ultimately what began as regulatory push to force transparency in over the counter markets may end up being a more fundamental reform of the clearing house sector itself.
"In an ideal world there would be a single global, not for profit, CCP backed by all central banks," said Orchard.